Mumbai-based highway infrastructure developer IRB Infrastructure Developers Ltd (IRB) has announced that it has completed acquisition of 74 per cent holding of MVR Infrastructure & Tollways Pvt Ltd (MVR Infra), which is a project special purpose vehicle (SPV) of MVR Infrastructure for a Build Operate Transfer (BOT) road project in Tamil Nadu.
The company is planning to complete acquisition of 100 per cent of the SPV for a total consideration of around Rs 130 crore, according IRB management.
The target SPV holds the concession for Omallur Salem — Namakkal BOT road project in Tamil Nadu.
It was formed for the purpose of implementing the project to widen the existing two-lane road covering 41.55 km from the km 207.050 (Salem) — km 248.625, on NH-7 in Tamil Nadu to four lanes along with improvement, operations and maintenance of some portion of the Salem bypass and NH-7 in Tamil Nadu to four lanes.
IRB has entered into a definitive agreement with shareholders of the MVR
Infra to acquire their entire holding in the company earlier in May 2012. As per the agreement, acquisition of the remaining 26 per cent holding of the SPV would be completed once the National Highway Authority of India (NHAI) approves the transfer of the rest of the holding to the IRB.
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“We expect the project to give a return of around 18-20 per cent. We will continue to evaluate such opportunities in future which can be value accretive,” said Virendra Mhaiskar, chairman and managing director of IRB. The project has around Rs 220 crore debt while the acquisition cost is around Rs 130 crore, he added.
The concession agreement for the project was executed in February 2006 for a 20-year period commencing from the appointed date, including construction period of 2.5 years.
The toll collection started in August 2009.